American consumers are entering the holiday season in a deeply depressed mood.
The Conference Board’s index of consumer confidence fell to 100.2 in November, the lowest level in four months. The decline reflects growing unease about persistently high inflation and fears of a potential recession.
This was the second straight month of declining confidence. In October, the index fell sharply from 10.7.8 to 102.5, which was the lowest level in three months. The October drop was worse than expected and the November decline was in line with forecasts.
“The combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth into early 2023,” said Lynn Franco, senior director of economic indicators at the board.
The index tracking current conditions fell to 137.4 from 138.7, in part due to rising gas prices and in part due to the perception that the economy has last momentum. The index tracking expectations six months ahead declined from 77.9 to 75.4, the lowest level in six months.
“Consumers’ expectations regarding the short-term outlook remained gloomy. Indeed, the Expectations Index is below a reading of 80, which suggests the likelihood of a recession remains elevated,” Franco said.
Franco said that inflation expectations increased to their highest level since July, driven by both gas and food prices. Intentions to purchase homes, automobiles, and big-ticket appliances all cooled.